Hubify sets sights on larger targets following successful FY21
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SME focused communications and IT leader Hubify says it will look to challenge its larger peers on the back of a transformative year in FY21.
Hubify (ASX:HFY) this week reported a compelling set of numbers for FY21, with annualised recurring revenue (exit run rate) up 63.5% to $13.9 million and recurring revenue up 36.8% to $11.2 million. Earnings before interest, tax, depreciation and amortisation grew 18.6% to $2.1 million.
These numbers were reported off a year in which the company went about a strategy for rapid growth, setting itself in the telecommunications market as a one-stop shop for Australian businesses with quality offerings including hosted voice, data, cloud services, mobility, cyber security and managed service.
The company has built a suite of offerings through strategic acquisition and investment, finding anchors in each field with cybersecurity and managed service provision (MSP) added to the books in late April and June respectively.
It also acquired a number of telecommunications providers, rapidly expanding its client books and geographic footprint simultaneously.
Coming off a pandemic-interrupted year and pointing to the fact that its cyber and MSP offerings were added late in the reporting period, CEO Victor Tsaccounis said the company was optimistic about further strong growth in the new financial year.
“Because of our acquisitions we now have a larger customer base and we have a broader product range, which means we can take our new products like managed service, to a larger customer base and get stronger rates of organic growth than what we’ve seen before,” he told Stockhead.
“That allows us to continue to pivot through the COVID-related challenges by cross-selling to existing customers, but we are also finding that it’s not as challenging for us to win new business as it was during the lockdown periods last year.”
Tsaccounis said beyond the initial shock of the pandemic, COVID’s challenges had prompted SMEs to explore their options.
“We’re also leveraging the fact that our users need to work remotely, and they need a remote unified communications solution that’s secure and not susceptible to cyber threats,” he said.
“That’s going to bring additional revenue into the business.
“On top of that, we haven’t even started realising the full value of our acquisitions and investments. We see that really starting to happen in FY22.”
Hubify ended last financial year with no debt and $5 million worth of cash in the bank, leaving it in a strong position to pursue earnings accretive acquisition opportunities should they present.
Tsaccounis said the company would assess opportunities against a defined criteria as it went.
“We have an acquisition pipeline that we’re working through now that has a mixture of two elements,” he said.
“One is like-for-like telco voice and data businesses, and managed services businesses with strong recurring revenues. Those are the two key areas.”
The strategic priority for the business in the new financial year will be to grow organically, making the most of cross-sale opportunities across its business divisions.
“We’ve established ourselves now as a one-stop shop for Australian businesses, to support all their telco and IT needs,” Tsaccounis said.
“That puts us in a great position to challenge our larger peers who don’t quite have that capability, and who are more focused on their core service offering.
“For us, we now have a broader product set, the full range of capability across telco and IT within the organisation, and be the trusted partner to Australian businesses in this space.”
This article was developed in collaboration with Hubify, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.